Asian Development Bank (ADB) has noted that maintaining macroeconomic stability, taking correct policies, having a prudent government, sound macroeconomic management, production diversification and domestic resources mobilisation are the major areas Bangladesh needs to keep its focus on, referring to what it can learn from the ongoing debacle in the Lankan economy. Although the country may see higher growth at 6.9 per cent in the current fiscal, the ADB cautions about rising inflation and widening of current-account deficit.
The Manila-based lender arranged a virtual press conference on Wednesday on the occasion of the release of the ADB’s annual flagship publication, “Asian Development Outlook (ADO) 2022”. The ADO forecasts that the current-account deficit in the country is likely to widen from 0.9 percent of GDP in FY2021 to 2.7 percent of GDP in FY2022 on increase in imports and decline in remittance growth. It stated that the GDP is projected to continue to grow strongly at 6.9 percent in FY22 on a strong expansion in exports and slight improvement in agricultural output. It also forecasts a better GDP-growth output for the next FY2023 when Bangladesh may grow at a 7.1 percent rate. However, the World Bank in its ‘Global Economic Prospects’ report said Bangladesh’s economy was expected to grow by 6.4 per cent in the current FY2022, while 6.9 per cent in the next fiscal (FY2023). However, the Bangladesh government has set a target for the economy to grow at a higher rate of 7.2 per cent in the current FY2022.
ADB Country Director Edimon Ginting said usually, crises do not arise all of a sudden, it happens by following substandard policies one after another. Bangladesh needs to keep focus on those issues that made a debacle for the Lankan economy. ADB Senior Economist Soon Chan Hong said the Russia-Ukraine conflict has heightened uncertainty and unsettled commodity markets. But they think the direct impact of the war would be limited for Bangladesh, which doesn’t have that much trade with Russia and Ukraine as of now.
In terms of export, Europe is one of the important markets for Bangladesh. If the war lingers on, the global economy, especially the Eastern European economy, will be hit hard, and Bangladesh will be affected as a result of that. So, the indirect impact of the war would be high for Bangladesh.
We hope and pray Bangladesh will escape Sri Lanka kind debacle.
